Iceland: Bleak outlook for shrimp industry – Fishupdate.com

Iceland: Bleak outlook for shrimp industry Published:  24 January, 2006

A GLOOMY picture of Iceland’s shrimp sector has emerged in a Ministry of Fisheries statement on the state of the shrimp fishery in Icelandic waters, interseafood.com reported.

In October last year, Fisheries Minister Einar Kr Gudfinnsson appointed a three-person working group to look into the state of the shrimp industry, its prospects for the future and to put forward proposals.

The Ministry statement says the state of the shrimp stocks in Iceland have been poor in past years and catches have been at their lowest for 20 years. There have been shortfalls in catches in deep sea and inshore fisheries are virtually closed. It is impossible to say when there may be a change in this situation.

” For shrimp fisheries to have a future in Iceland, there has to be shrimp fishing in our waters. If Icelandic processors expect to operate using imported raw material, the industry’s situation will only deteriorate further. Those countries that compete with Iceland on deep water shrimp are also experiencing difficulties, but in these case the problems is not a lack of fishing opportunities but rather low product prices, unfavourable exchange rates and a great deal of competition brought on by more shrimp being available on the market.’

Recently the króna has been steady at around 104 and it is difficult to predict when it may finally weaken. The finance ministry has said that it reckons on an average exchange index figure of 114, which indicates more tough times ahead.

At the beginning of 2005 there were 11 working shrimp plants in Iceland, a figure that had fallen to 8 by the end of last year. At the same time, employment in the shrimp plants fell from 450 full jobs to 220. This has caused problems especially for smaller communities where shrimp processors have been major employers in the past and where there are few employment alternatives.

Worst hit is the village of Sudavík, where 30% of employment was in the shrimp plant that has now closed down. In Stykkisholmur 7% of local employment was generated by the now-closed shrimp plant. As well as lower employment, local authorities feel the pinch as their tax revenues are also lower.

The ministry of fisheries intends to legislate to help the shrimp sector. Operators will not lose unused quotas and will catch levies will only be on landed catches.

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